David Trone Quotations

Full-service firms are awash in capital and looking at means of effective deployment. Over the last few weeks, media reports have been fuller than normal with buzz of these firms exploring large deals.

When they say more than half, we're thinking most.

There are substantial synergies and relatively low integration risk.

It gives them a way to get in the game without having to put capital at risk.

Merrill has consistently bought back about $1 billion per quarter since early 2004, a pace that lately has been insufficient in offsetting balance sheet growth.

The online brokerage industry is becoming a bit of an oligopoly.

The rate increases have been going on for quite some time, and it really hasn't had an impact. And in the case of Goldman, you still have sustainable core revenues up very strong.

We believe core income should be slightly higher in the first quarter compared to the previous quarter, excluding one-time charges, reflecting improvement in capital-markets sensitive businesses (trading, investment banking, and wealth management).

The partial quarter effect of the two acquisitions should result in a 17% sequential revenue lift, while core expenses (excluding any one-time restructuring charges) should rise about 23%, as the company only begins to realize both expense and revenue synergies.

Fink is coming from a position of power because of his recent success.

Financially, the deal seems to be of little impact. We estimate ultimate earnings impact as flattish for Merrill over the next few years.

This was a very strong report, both in terms of asset flows, account adds and trading activity.

The transaction makes a lot of sense strategically at a time when U.S. regulators are frowning upon financial incentives to brokers for pushing in-house funds.

Our estimate of $340 million in advisory revenue easily places the quarter as the highest for the firm post-bubble, and should move 2005 advisory revenues about 28% over the prior year.

This is the first quarter in a long time where you will see year-over-year comparisons that are negative. And we'll probably see results for most of the quarters in 2005 being down on a year-over-year basis.

Asset management acquisitions are safer, in our view, given the predictability of earnings, although they will likely be more expensive than banks or consumer finance companies.

It's not likely a firm would double its revenue in a sequential comparison. One should assume that some of that's proprietary trading.

Its track record is outstanding, they've earned tens of billions of dollars over the last several years and they've never come close to having a negative trading line. I'd say that's reasonable risk-reward.

It's in last place with no real assets to improve their position. Discover desperately needs to have an improved value proposition for the cardholders. That's where it all begins.

On a year-over-year basis, Lehman's results are outstanding, while the negative sequential comparisons are a product of the strength of the 2005 third quarter.

These guys are global companies. Goldman has half its revenues come from outside the U.S.. They can find profits wherever they need to.